THE new Israeli government headed by Benjamin Netanyahu has to be seen as a setback to American and other efforts to achieve peace in the Middle East.
In his opening statements, consistent with his previous positions, Mr. Netanyahu made it clear that he does not intend to pursue the two-state approach to resolving the 61-year-old problem of national homelands for Palestinians and Israelis. That goal was stated most recently in a conference hosted by President George W. Bush at Annapolis in November, 2007.
By not seeking the two-state solution, Mr. Netanyahu's government also fails to address the long-term problem for Israelis of the growing Arab population - aside from that in the West Bank and Gaza - which now stands at 20 percent of the Israeli population.
Arabs' population growth rate in Israel exceeds that of Jewish Israelis, and Jewish immigration does not make up the difference. If Israel does not resolve this problem, its future as a Jewish state will be in jeopardy.
Mr. Netanyahu's position on these issues aside, he has named as his foreign minister Avigdor Lieberman. Mr. Lieberman, whose ultra-nationalist Yisrael Beiteinu party Mr. Netanyahu needed to form his coalition, is outspoken in his opposition to an agreement with the Palestinians. He also lives in a West Bank settlement, dwellings that pose a contentious issue for Israeli politics and any long-term agreement with the Palestinians.
As to prospects for an accord during the Obama Administration, the U.S. effort is still headed by the potentially effective George Mitchell, a former senator and skilled peace negotiator.
The Palestinians don't help things, remaining divided between Hamas, which rules an isolated Gaza, and Fatah, which holds on to the West Bank, except for parts controlled by thousands of Israeli settlers and security forces. The new Israeli political configuration will provide Mr. Mitchell a very hefty challenge.
Who governs Israel matters to Americans for three important reasons. First, anything that happens in Israeli-Palestinian relations holds the potential to become a major threat to regional and world peace. Second, the United States continues to serve as Israel's long-term security guarantor. Third, the United States provides Israel with $3 billion a year in aid, an obvious burden at a time of economic crisis at home.
For these reasons, the Obama Administration needs to find a way to move the Middle East peace process forward despite the new government and other barriers to a settlement.